Invest1 publisher3 min readPublished Updated
The CFPB's Free-Then-Fee Open Banking Split Is a Litigation Budget, Not a Price List
A threshold design that gives fintechs free pulls up to a limit and banks fees above it hands both industries a grievance. Model data costs against court dockets, not a final rule.
The Investor · Invest desk
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What happened
- A 90-day review period is underway after the CFPB submitted its open-banking proposal to the Office of Information and Regulatory Affairs in early August.
- The CFPB is reportedly trying to appease both banks and fintechs with a plan that would permit access to consumer data up to a certain threshold at no cost, but allow banks to charge fees above a set amount; the approach was first reported in June.
- Ashwin Vasan, a partner at the consulting firm FS Vector, said: "No matter what they propose or finalize, either the banks or the fintechs are going to litigate it."
- Vasan said: "The statute is silent on fees, and no matter what the CFPB proposes, I would expect either banks or fintechs to litigate."
- The expected plan is likely to be a major about-face from a Biden-era rule that prohibited fees for data access; that earlier rule has since been set aside.
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Why it matters
The Consumer Financial Protection Bureau sent its open banking proposal to the Office of Information and Regulatory Affairs in early August, starting a 90-day review [1]. Reporting summarized by American Banker says the bureau is trying to satisfy banks and fintechs at once with a plan that allows consumer data access free up to a threshold and lets banks charge fees above a set amount [2], which is the kind of split that leaves both sides with a grievance and neither with a settlement.
That is not a reading of the tea leaves. Ashwin Vasan, a partner at FS Vector, put it directly: "No matter what they propose or finalize, either the banks or the fintechs are going to litigate it" [3]. His reason is structural rather than political, the statute is silent on fees, so any number the CFPB picks is a policy choice someone can challenge [4].
The direction of travel is clear even if the arithmetic is not. The Biden-era rule prohibited fees outright and has since been set aside [5], so a threshold plan moves aggregator data costs off zero by design [16]. Whether it moves them much depends on parameters that are not public: what counts as a pull, where the free ceiling sits, and who sets it. The Financial Technology Association, in a June letter to then-acting director Russell Vought, called data rationing proposals "unlawful and unworkable" and argued that a fee tied to bank-set pull limits would let the largest banks decide how much competition they are willing to tolerate [11]. FTA president and CEO Penny Lee says consumers own the data and should not have to pay to access it, and has asked the bureau to keep the fee ban, rationing included [10]. Fintechs frame the reversal as price-setting, or a toll [9].
The banks are not asking for the rule either. The Bank Policy Institute, which represents many of the largest US banks, says today's data-sharing ecosystem is the product of private sector effort rather than a government mandate, and that a proposed rule should not interfere with it [12]. That is an argument for less rulemaking, not for a better fee schedule.
Meanwhile the current baseline is already not free. Eyal Sivan, host of the Mr. Open Banking podcast, notes that "fees are being charged now, even though the current rule says they shouldn't be," and expects the new rule to put guardrails around what JPMorgan has already done [14]. He also expects the proposal to offer several alternative fee structures rather than one [13], and points out that some of the loudest objectors are large firms that built businesses on free data [15]. BPI's own litigation is stayed pending the new rulemaking [6]; Vought asked for that pause and later had to backtrack [7]. Both industries have spent the past year lobbying the White House and Treasury [8].
What to watch: the OIRA clock runs out around early November [c16b], and what emerges is a proposal, not a rule. If it ships with multiple fee alternatives [13], treat the range as your planning band rather than the midpoint. Watch who files first, and whether the stayed BPI case resumes, because that docket, not the Federal Register, will set the date your data costs actually change.